How Trump's Tariffs Could Shake Up the U.S. Car Market
- jsibaja
- Feb 4
- 3 min read
Just when you thought the auto industry had enough to juggle with EV transitions and supply chain headaches, President Trump’s proposed 25 percent tariffs on imports from Canada and Mexico are looming like a storm cloud over the car market. While these tariffs have been postponed for 30 days following negotiations, their potential impact on car prices, production, and supply chains is hard to ignore. And if they do go into effect, buckle up—because buying a new car in America might soon come with a much heftier price tag.
What’s the Deal with These Tariffs?
On the second day of his second term, President Trump announced his intent to impose steep tariffs on imported goods from the U.S.'s northern and southern neighbors. While he didn’t explicitly single out cars and auto parts, it's hard to imagine the auto industry dodging the bullet. After all, a significant chunk of the vehicles rolling on American roads comes straight from Canada and Mexico.
Trump remained vague, telling the press, “We’re thinking in terms of 25 percent on Mexico and Canada,” as reported by The New York Times. If these tariffs come to life, the consequences could be massive—not just for automakers but for car buyers who might suddenly see price hikes on popular models. And if demand takes a nosedive due to cost increases, some vehicles might even face discontinuation. In short, this could be a major shake-up.
Which Cars Would Be Affected?
If you drive a truck, SUV, or even an affordable sedan, chances are high that it was built in Canada or Mexico—or at least contains parts sourced from these countries. Here’s a look at how some of the biggest players in the auto industry might feel the squeeze:
General Motors (Chevy, GMC, Cadillac, Buick)
Chevy Blazer EV, Equinox EV, and Honda Prologue? All built in Mexico.
Gas-powered Chevy Blazer? Same story.
The ever-popular Chevy Equinox, which saw 207,730 sales last year? Mexico again.
The GMC Terrain and even some Silverado trucks come from GM’s Canadian and Mexican plants.
If tariffs increase production costs, GM might shift more of its manufacturing to U.S. plants in Indiana and Michigan. But that’s easier said than done, and we could see price hikes or even production slowdowns while they adjust.
Ford’s Fiesta—or Rather, Its Tariff Fiasco
The Bronco Sport and Maverick? Made in Hermosillo, Mexico.
The Mustang Mach-E, a big EV success in 2024? Built in Cuautitlán Izcalli.
Ford’s Oakville plant in Canada is currently idled, but for the lucky few who can drop over $300,000 on a Mustang GTD—hand-built in Ontario—tariff costs probably won’t be a dealbreaker.
Stellantis (Ram, Dodge, Chrysler, Jeep)
Chrysler Pacifica and Dodge Charger? Assembled in Canada.
Ram Heavy Duty trucks and Jeep Compass? Mexico.
The brand-new Wagoneer S electric SUV? Also from south of the border.
It’s Not Just American Brands
A handful of non-U.S. automakers also depend on Canada and Mexico to build some of their best-selling models:
Toyota: The Lexus RX and NX SUVs come from Ontario, while the RAV4 is split between Canada and the U.S. The Tacoma pickup? Exclusively built in Mexico.
Honda: The Civic sedan is made in Ontario, while the CR-V is produced in both Canada and the U.S. Meanwhile, the HR-V—one of Honda’s hottest sellers—comes straight out of Celaya, Mexico.
Mazda: The affordable Mazda3 and CX-30? Built in Salamanca, Mexico.
Nissan: The Kicks, Versa, and Sentra all roll off production lines in Aguascalientes, Mexico.
And let’s not forget the luxury brands that manufacture in Mexico:
Infiniti QX50 and QX55
Mercedes-Benz GLB-Class
Audi Q5
BMW 2-Series Coupe
Volkswagen’s Taos, Tiguan, and Jetta
What Happens Next?
At this point, the situation is fluid. Canada and Mexico have secured a temporary postponement of the tariffs, but there’s no clear long-term solution in sight. Meanwhile, the proposed 10 percent tariff on Chinese imports has already gone into effect. If the full 25 percent tariffs hit North American auto imports, the U.S. car market could experience everything from price hikes to production shifts and even potential layoffs in plants that rely on imported parts.
For now, all eyes are on trade negotiations. If no agreement is reached in the coming weeks, American car buyers could soon find themselves paying a lot more for their next vehicle—or reconsidering their options altogether.
